NHS England Review of Funding Allocations

30 October 2013

ANEC has made representation to NHS England to voice concerns about a review it is currently carrying out in relation to the funding that will be allocated in future to various health bodies, including Clinical Commissioning Groups (CCGs), which could see a substantial transfer of funds away from the North East.

In advance of the transition to the new health system in April 2013, ACRA (the Advisory Committee on Resource Allocation) developed a target formula for allocating resources to CCGs. At the time, NHS England decided not to proceed with it as there were concerns that the formula would target resources towards areas with better health outcomes. However, NHS England is now carrying out a review of funding, as part of which it has published a paper showing the actual allocation for each CCG in 2013/14, compared with what it would have received if the ACRA formula had been in force.

The paper shows that every CCG in the North East would lose money under the ACRA formula, with three CCGs losing between 8% and 11%. The total loss to the North East would amount to around £166m.

Working with health partners, the Association has made a submission to NHS England setting out our concerns.  It notes that the NHS Mandate sets out the Government’s expectation that the principle of ensuring equal access for equal need will be at the heart of the approach to allocating budgets. The new formula, however, focuses almost exclusively on age and gender, with a correspondingly smaller focus on deprivation, and does not include the health inequalities weighting which was used to account for unmet need as well as ill-health prevention. This approach seems counter to the Mandate and to the Health and Social Care Act duty to reduce inequalities.

The Association’s views are supported by a recent article in the British Medical Journal which maps the differences between current allocations and the ACRA formula. This demonstrates a movement of funding away from poorer and less healthy areas towards more affluent and healthier areas. For example, in South Eastern Hampshire, where healthy life expectancy for women is 68 years, NHS funding to the local CCG will increase by £164 per person (+14%); while in Sunderland, where healthy life expectancy for women is 58 years, funding will fall by £146 per person (-11%).

A key role for NHS England is to reflect on inequalities throughout the system, including public health; one element of the NHS cannot be examined in isolation, and any disinvestment in one part of the system should lead to increased investment elsewhere in the system.

The submission argues that if CCG allocations in the North East are going to be reduced, allocations for primary care, public health and social care will need to be adjusted to compensate. Bearing in mind the above average health needs, linked to deprivation, that are prevalent in the North East, there is a real need for a strategic discussion about the health and cost reduction benefits that could accrue from a substantial increase in investment in local early intervention and preventative measures.

As a key stakeholder, ANEC is seeking an opportunity to work with ACRA, NHS England and health partners to explore the options and shape decisions about future funding allocations.

Whilst the current review does not directly affect the money that councils receive to carry out their public health role, there are real concerns that the proposals could see a substantial transfer of funds away from the North East.

View the full ANEC response here.